The proposed new tax plan will cap the mortgage interest deduction for homes at medium sale price depend on region. The proposal however will grandfather in any purchases before the new law go into effect.

If this tax law pass, There maybe a rush to purchase homes in order to continue full deduction under the old tax law. But expensive home purchaser has to be careful because after the new tax law is enacted we may see home prices plummet as a result of shrinking demands due to lost of tax advantage.

This new tax proposal could be the needle to burst the housing bubble.

This entry was posted on Tuesday, November 1st, 2005 at 5:08 pm and is filed under Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.